Mexico, Canada and now the UK are among those offering direct financial support to homeless people. The results are encouraging
Homelessness is a growing problem in the UK with a record number of people living in temporary accommodation. It adds urgency to a new trial that will see homeless people in England and Wales receive direct financial support to help get them back on their feet.
The pilot will recruit 360 people, half of whom will continue to receive their current level of support – so acting as a control group – while the other half will receive extra financial assistance, albeit not directly. The charity Greater Change will hold and spend money on behalf of participants to ensure that their benefits payments are uninterrupted.
The trial is being run by King’s College London (KCL). Prof Michael Sanders, director of KCL’s experimental government unit, told Positive News that it was inspired by similar schemes in Mexico and Canada.
Since 1997, a cash-transfer scheme in Mexico now known as Prospera has provided cash support to households living below the minimum welfare line. The programme has reached more than 26.6 million people and has been shown to improve child development in rural areas, reduce the likelihood of child labour, and decrease food insecurity by 15%.
Meanwhile, in Canada, the New Leaf Project saw one-time cash transfers of CA$7,500 (£4,100) to 115 newly homeless people in the Vancouver area. A study into the pilot found that it improved outcomes for homeless people and saved the state money. “Cash transfers may offer a cost-effective solution to combat homelessness for recently homeless individuals without severe substance use, alcohol use or psychiatric symptoms,” it concluded.
Contrary to what critics said would happen, recipients generally didn’t buy so-called “temptation goods” like alcohol, drugs and cigarettes, the study showed.
Prof Sanders says that such findings add to the sense that “sometimes governments get in their own way when trying to help people, and that sometimes, by trusting them to do the right thing, we can achieve greater impacts more cost effectively”.
Sometimes, by trusting people to do the right thing, we can achieve greater impacts more cost effectively
The KCL trial will be the first of its kind in the UK, so the results will be significant. It is funded by the Ministry of Housing, Communities and Local Government, through the Homelessness Test and Learn Programme, which aims to find solutions to homelessness.
“We hope that the findings can help shape government policy at the local and national level in the UK, as well as internationally,” said Prof Sanders.
“Success would mean robust evidence, one way or the other. My mission is to help take an evidence-based approach to this. I’d love it if the intervention turned out to be effective, and if we could make a positive case for it to be rolled out – if we could see reductions in homelessness, improvements in people’s mental and physical health.”
The trial will conclude in January 2027, with early results expected in March 2026.
Main image: ferrantraite
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